Avinash Gupta, leader, financial advisory, Deloitte Touche India, said, "Along with scaling up business, the valuation of the companies will go up through the inorganic route. That will help the PE investor make good returns by exiting during an initial public offering or M&A."

The global network of the PE firms is used widely to guide the portfolio companies' expansion, he added.

For instance, Actis, which invested about $45 million in Paras Pharmaceuticals in 2006 to pick up around 25 per cent stake, sold the controlling stake (Actis acquired more stake later) for about $726 million along with Sequoia Capital to Reckitt Benckiser last year.

A couple of big ticket deals took place with corporate groups where PE firms hold a very minority stake. Mahindra & Mahindra, where Temasek has a stake, bought Sangyong Motor Company in a deal worth $463 million.